Shadow here, shadow there: meet the cosmetics startups that are colouring innovation
Personal care and beauty, a steadily growing market, has adapted in recent years to meet new consumer demands, with cosmetics startups Lico Cosmetics, Freshly Cosmetics and Cocunat offering organic products, boosting their digital channels and opting for omnichannel while shifting towards customisation.
In China, painting your nails is an ancient art. The Bust of Nefertiti (1,345 B.C.) evidences ancient use of eyeliner. In the Roman Empire, women used lead-based makeup. The cosmetics industry has evolved over the centuries, along with beauty standards and consumer demands. In 2021, the industry had a turnover of âŹ8.21 billion in Spain, with a year-on-year growth of 7.38% compared to 2020, according to Stanpa (National Association of Perfumery and Cosmetics). Across the pond, the Latin American cosmetics market reached a value of $32.5 billion in 2021 and is expected to grow by 5% every year from now until 2028.
This report also points out thereâs a new type of consumer that has emerged, one it defines as CSS: conscious, supportive and sustainable, according to the analysis by Stanpa. The data back it up: the global sector of personal, eco-natural and organic care grows between 8% and 10% each year, according to market research. By 2025, it will have reached a value of more than $25.11 billion, according to Grand View Research.
Cosmetics startups are already innovating to meet these new demands. BBVA Spark takes a look at three adjectives that illustrate the top trends from some startups are colouring the future of the industry.
Going green for the environment
The Spanish company Freshly Cosmetics, whose face, body and hair care products are based on eco-friendly natural ingredients, is one of the up-and-coming cosmetics companies finding success on the market: it had a turnover of 45 million euros in 2021 and its founders have been included on the list of âThe 100 Entrepreneurs 2023â of Emprendedores magazine. Beyond creams and serums, they also offer bamboo toothbrushes and reusable cotton discs. And beyond being manufactured locally, their packaging is reusable and can be refilled in their stores. âOur mission is not only to help customers, but also the environmentâ, says Salva Marsal, Freshlyâs communications manager.
At LICO Cosmetics, which specialises in creams for all skin types, they are also committed to innovation as well as local production in Spain. âWe have a very extensive R&D, we never stop looking for cosmetic active ingredients that provide maximum effectivenessâ, says EstefanĂa Ferrer, CEO of LICO Cosmetics (Andalusia) and eco-beauty enthusiast. As a chemical engineer, Ferrer has a specific vision of cosmetic treatment, which she applies in her laboratories by combining new innovative formulas, green engineering and natural vitamins.
Another notable startup in the field of sustainable cosmetics is Cocunat, one of the first brands that opted to digitalise non-toxic cosmetics through its marketplace. âIn 2013, we detected a boom in eco and sustainable food and we saw an opportunity for that wave to break into the cosmetics worldâ, says Sara Werner, CEO of Cocunat. The startup, which has raised 5.5 million euros in funding, now operates in Spain as well as in Mexico, Asia and the USA.
In Latin America, there are a host of entrepreneurs who are shaping the cosmetics industry with a sustainable focus. Among them is Mexican brand Agua de Nube, which mixes natural active ingredients and microalgae to offer organic, biodegradable and synthetic-free body and hair treatments, even accessories. Colombian company Montesol, which manufactures sustainable toiletries and cosmetics for men, is also on the rise.
Digital: omnichannel and influencers
Many of these new businesses that specialise in cosmetics are started as e-commerce or marketplaces and then consolidate their strategies and expand into new markets, formats and services, both online and off. To that end, Freshly closed a $22 million investment round in 2021 to âpromote internationalizationâ. Today, it has eight brick-and-mortar locations in Spain and sells its products online in 36 countries.
LICO Cosmetics defines itself as a digital native brand, marketing the bulk of its sales through its e-commerce. Meanwhile, Cocunat is committed to using the online channel to reach different parts of the world. âOur audience is millennials and generation X, who are looking for new high-quality formatsâ, explains Werner.
To grow their online presence, these beauty start-ups rely on social media marketing, particularly on influencers. For example, Paula EchevarrĂa, Laura Escanes and Verdeliss, who have millions of followers on their Instagram profiles, recommend Freshly Cosmetics products. Cocunat has microinfluencers with an international focus, like Kassi Mansfield.
Cutting-edge technologies are also making their way into the cosmetics industry and will continue to do so. For example, ModiFace allows customers to try on make-up virtually through augmented reality. Meanwhile, Johnson & Johnson has developed a personalised skincare system that scans more than 2,000 facial attributes, from dark circles under the eyes to fine lines.
Customised for a new audience
âThere is a growing awareness and education about preventive careâ, says LICO Cosmeticsâ EstefanĂa Ferrer. The other startups contacted by BBVA Spark agree that users are increasingly demanding more prevention and personalisation. Freshly, for example, has this kind of a questionnaire. In a test that takes just two minutes to complete, they direct the userâs preferences towards a purchase recommendation.
âThe ways and the time people use to shop have changed quite a lot and will continue to change (…) Weâve even altered products or formulated new ones thanks to customer feedbackâ, adds Salva Marsal of Freshly Cosmetics. In this sense, the company offers âwell-ageingâ serums to meet the demands of its consumers, who are increasingly concerned about age. Cocunat also believes that adapting to each customer will become increasingly important. According to its CEO, Sara Werner, âweâll see the customisation of cosmetics in coming years, with new formatsâ.
Cosmetics has been playing a role and evolving since all the way back to ancient China, Egypt and Rome. Now, thanks to a roster of startups that include Freshly Cosmetics, Cocunat and LICO Cosmetics, itâs moving forward to paint an increasingly sustainable, digital and personalised picture of the industry.
